Barring legal or legislative interference, the Obama health care laws are scheduled to be fully implemented by 2014.
In the past few weeks, we’ve seen a growing number of states refuse to set up health insurance exchanges and some are balking at an expanded state role for Medicaid as well.
But while states avoid getting entangled in the bureaucracy, does that mean much for individual Americans?
Former New York Lt. Gov. Betsy McCaughey is author of “Decoding the Obama Health Law.” She says the states forcing the federal government to create the exchanges will have two major impacts. The first is an almost certain delay in the creation of the exchanges.
“Implementation, predictably, will be delayed because the federal government undoubtedly won’t be able to set up federal exchanges in all those states by next October when the exchanges are supposed to be up and running,” said McCaughey.
The exchanges are intended to be a third option for consumers to obtain coverage, along with the more traditional avenues of obtaining employer-based coverage or purchasing it directly. However, the biggest result of these states refusing to set up the exchange could be less taxpayer assistance for those getting insurance through an exchange.
“It’s going to make a very big difference and here’s why,” said McCaughey. “The law says that if you go to a state health insurance exchange to buy your health insurance, you are entitled – and I use that word because that’s exactly what I mean – entitled to a tax credit. In other words, taxpayer help paying for your health insurance. If your household earns up to $92,300 you’re entitled to that help. That’s means that the full cost of that health plan won;t be on you. But the law only allows to get that tax credit if you’re in a state health insurance exchange.”
McCaughey says those credits are not promised if the coverage comes through a federal exchange, and the difference could be significant given how quickly premiums are expected to rise.
“Those health plans are going to be very expensive,” she said. “Even the federal government anticipates that the premium is going to go up seven percent next year – maybe $14,000 or $15,000 for a family plan. That’s a lot of money.”
The confusion over exchanges is just one headache on the horizon. McCaughey says another nightmare is Obama’s intention to expand coverage mostly through Medicaid – which is already in dire straits.
“That’s a program where the cost traditionally has traditionally been split between the state governments and the federal government,” said McCaughey. “The federal government says we’re going to pay for the entire cost of expanding this enrollment. But states are worried. The federal government can change its mind, break it’s promise any time. Since when haven’t politicians broken their promises. So the states are very reluctant to enroll a lot of new people in Medicaid and then get socked with the bill when the federal government reneges on its promise to pay the full cost.”
Even in its pre-Obamacare form, Medicaid is incapable of adequately reimbursing hospitals and physicians. Many doctors refuse to see Medicaid patients as a result. McCaughey says that will only get worse and life will not be any better for those going from no coverage to being enrolled in Medicaid. In fact, she says a Medicaid patient’s health is in more danger by the time they find a doctor willing to treat them.
“It’s kind of broken promise medicine,” said McCaughey. “There are quite a few studies that show that a patient on Medicare who has surgery has a substantially higher risk of dying during that surgery than someone who has private health insurance – and in fact a worse risk of dying even than someone who has no insurance at all.”
